The Ho Chi Minh Citypolice Wednesday arrested a former official for allegedly putting up public funds as security for a bank loan for a private company.

Le Quoc Cuong, 53, former chief of a committee in charge of paying land-related compensation in District 1, will be held for four months on charges of "abuse of power."

According to the police, in July 2010 Cuong used the committee's VND10.7 billion (US$512,000) deposit at Agribank -- money meant to be paid to people whose lands had been acquired for infrastructure works in District 1 -- for a VND10.5 billion loan for Cuong Nguyen Limited Company based in District 2.

When the company failed to repay the loan on the due date, the bank appropriated the security.